This Christian doctrine lies within a wider spectrum which includes at the one end the pagan concept of animism - the Divine is in everything and everything is Divine - and at the other, concepts of revealed books, in which the spirit is made not flesh but word. It is interesting that Christianity spans quite a wide range of that spectrum.
In the fourth Gospel, the concept of incarnation rests first on the personification of "The Word" with antecedents in the Hebrew wisdom literature's personification of the Logos - the Word. The writer of St John's Gospel identifies the man Jesus with this personifying of the divine. At this stage in the development of Christian thought there's a lot in common with the Hindu concept of the Avatar, and some Indian Christians are redeveloping this. However, Catholic Christianity did not go that way but developed the doctrine of the Trinity instead, effectively "taking the manhood of the Christ into the Godhead".
Incarnation in the wider sense is, I think, still a valuable insight, seeing the divine in the physical and mundane. It is consistent, in quite a powerful way, with the principle of Sea of Faith's "religion as a human creation". In becoming Man, God breaks down the barrier between the heavenly and the earthly. The veil in the temple is torn in two.
We may rightly reject Incarnation as a Christian dogma, but as a profound myth it is very powerful.